SelectSectors.com Market Pulse
 

  
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   Note:   None of the comments about stocks, ETFs etc. on this web page are recommendations and are provided for information only. Each investor is responsible for their own investment decisions.
 

 


Table of Select Sectors and their corresponding
ETF and or ETN and or Market Index in alphabetical order

 

 

 
Top  stocks underlying Fidelity Select Sector Portfolios

 

 

 

Cruise Control Portfolios (CCP)
 For ETFs, ETNs and Stocks

Note:
The Oil, Oil-Service and Natural-Gas Index stock components have just been added to the data sets being processed.
 

 


( 07/03/09 ) Only The Cruise Control Portfolios have been updated.

      Short term CCP

      Medium term CCP


  
( 06/26/09 )  The below chart of Institutional Index ($XII) is declining and suggests scaling out of long positions or hedging with shorts ( proshares.com ). The VIX volatility or market fear index continues to decline but may be misleading as a seasonal low is expected by the 2nd week of July. Also the below SSX chart ( composite of all 41 Fidelity sectors) has all Hurst envelopes pointing Down, which is not a good sign.


        The political attempt to have the IMF dump hundred of tons of gold bullion on the market coupled with Gold's strong overhead resistance is expected to prevent any Gold breakout over the short term time frame.




   ( 06/12/09 )
 The SelectSectors Market Indicators have deteriorated and caution is appropriate. After a sharp market correction it is always clear what action you should have taken. Prediction before the Market correction is very difficult and often we only have clues to the impending market action. Presently the market indicators are issuing a double cautionary signal. Also, if you study the market charts in detail , a very strange but well defined wedge is forming. This event coupled with the Summation Index forming a second local top, suggests  to put on shorts ( proshares.com ) and enjoy the summer.

Gold could not penetrate it's overhead resistance and continues to Decline. The U.S. Dollar also bounced Up which added to Gold's difficulties. This Gold pullback may be painful and hedging or selling may be appropriate. Since creation of U.S. funny money continues unabated, this pull back may provide another buying opportunity.


The  20 yr Treasury
2x short ( TBT ) fund continues to move Up and may be trouble for continuing the current market rally as well as impacting the troubled Housing market.

    


The SelectSectors market Indicators   show the Nasdaq or High Tech market to be stronger then the general market. The Cruise Control Portfolio (CCP) Tables identify the best risk adjusted trading vehicles.

          A  cautionary flag must be raised due to the current market  mixed signals. Money management and a trading plan become the most urgent themes.

Some Suggestions:

1) Go to a market neutral position, with both long and short positions. This allows you to safely tread water which is a lot better than drowning.

2)  Quickly sell or reduce any positions posting large declines. (ie) Capture profits

3)  Close out all long positions and buy short positions. ETF short funds would be the trading vehicle of choice.(eg) proshares.com

4) Close out all long positions and stay in cash. This is safe in a decline but presents the problem of how do you re-enter the market.

      The real difficulty here is that math and computers can identify the current issues that are trending, but very little, if anything can be predicted as to how long the current trend will last.

 The market player, if he is to survive, must employ active money management techniques. (ie) Be prepared to exit and possibly employ the opposite trade. (eg) Employ the Parabolic Stop & Reverse(SAR) technique or simply exit when an 8% or so decline from it's recent peak value occurs. Another method  is to exit when the current market price falls beneath the Low of the past 10 or 20 market days.



  A new Gold stock optimization  chart and table has been added to the Gold page. Check it out.

    Schippi continues to think  precious metals mining stocks and bullion are an important defense to the U.S. Dollar Decline and the insane Banking and Federal Reserve mismanagement.

     Commodity ETFs are another way of hedging against the Decline of the U. S. Dollar.
     


   Below is a long term chart that displays the recovery cycle after the previous big-crash. This recovery was very choppy and took quite awhile before a solid up-trend  formed.





     The U.S. Dollar Index chart requires serious attention, as it's decline may trigger a rush into alternative investments. Also, our Fed Chief, "Helicopter Ben" is doing everything he can to end the U.S. Dollars  important role as the world's reserve currency. Also note the below Dollar chart has posted a Double Top formation which is not a good sign.
    


  Also, as the U.S. Dollar weakens foreign currencies are brought into play. Monitor the Currency ETFs.



    Major Market Indices


  
 




    The below Institutional Index ( XII ) chart  displays what the Big Boys are doing.
 

 

 

 


Volatility: $VIX(SP500) StockCharts.com


    

 




Modern Portfolio Theory ( MPT ) applied to Fidelity SelectSectors.






  

 
 SelectSectors.com Market Index ( SSX ) Ribbon chart

 


SelectSectors.com Market Index ( SSX ) Hurst chart

( The SSx Indicator is the average of the aggregation of all 41 sectors daily percentage changes.)

 


SelectSectors.com Market Index ( SSX )  Oscillator  chart

 


SelectSectors.com Market Index ( SSX )  Summation Index  chart



 

Comments and Info


 


 Suggested StockCharts.com  chart settings
    for exiting a Declining market.


    Exit strategies are very important.
Check Out the Parabolic SAR method
 

 
 


     The “smart money” will keep trading the dips and rallies,
even if the market as a whole goes nowhere for the next four years.

     Frankly, whether you index, value hunt, diversify, buy growth stocks,
 whatever—this is no time to invest in the market.

     But it’s great time to be trader.
 

 


Please remember, that every "Hot Trend" will eventually peak out and the Decline, perhaps very rapidly. Recent examples are China(FXI), India(INP) and Natural-Gas(UNG ). Therefore to protect your gains you must have an exit strategy. The SelectSectors "Timing page" offers examples.
 

 


      For decades Fidelity offered trading with their sectors based on  hourly pricing. They have now terminated hourly pricing and imposed onerous trading rules. For this reason I use the Fidelity Sectors to determine the "Best" sectors, but then purchase either the underlying stocks or corresponding ETFs, Holders, ETN etc.

  As an example, Energy Services ( FSESX ) is currently a strong sector and Power Shares ETF, Dynamic Oil & Gas ( PXJ )  has comparable performance.

  Utilities ( FSUTX ) has very strong long term performance and Vanguard's Utility ETF ( VPU ) has comparable performance.

( 5/12/07 ) Schippi

 

 


  What is an ETF?
 

 


  What is an ETN?
 

 


  What is an HOLDR?
 

 


  What is an SPDR?
 

 


 A new and powerful tool from ETFtrends.com


When to Hit the Escape Button ( Tom Lydon )
  
 

 


There now exists ETFs (eg) ProShares.com that allow you to short almost all sectors. So if you have open positions that start to rapidly decline, besides the plain Sell option you can now hedge and  essentially be market neutral.
 

 


Comprehensive list of shorting  ETFs in alphabetical order provided by MoneyandMarkets.com
 

 

 
 
Bear Market Funds
 


 


 Investing 101 ( 10/24/2008 )
   

 


E-mail Comments to Schippi@SelectSectors.com

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